The Grand Duchy

Geographically, Luxembourg is a small country bordered by Germany, France and Belgium.  As well as being the world's only surviving Grand Duchy, it's a major financial centre, courtesy of its position and the comparative freedom under which banks can operate (at least back in the 80s when it really began to flourish), and nowadays is a governmental and administrative centre of the EU too - as befits a founding member.

But it still has a reputation of being a bit of a cultural backwater, a boring place.  As an example, I cannot think of a single famous Luxembourger.  It's tough enough thinking of a famous Belgian (a country similar in many ways to its smaller neighbour) but from there I can come up with 3 - cyclist Eddy Merckx; Herge, the bloke who wrote the TinTin stories; and Eddy Wallie, a bizarre sub-Las Vegas Walloon crooner who featured regularly on Channel 4's Eurotrash back in the 90s.  But from the Duchy?  Nope, not one.  Sorry.  Good God, the place even had to resort to hiring horse faced karaoke hag Celine Dion (pre tooth and nose job) to represent it at one Eurovision Song Contest (and she didn't win).

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It seems a nice enough place, quite picturesque.  There is lots of rolling countryside around the capital city, called imaginatively Luxembourg, with some nice (but small) woodland.   There's a river that runs through the city centre, in quite a deep gorge spanned by a lovely old bridge and surrounded by a very nice park.  And quite a lot of motorways around the city, linking it to its neighbouring countries.  There is a native population of about half a million, plus probably as many ex-pats working in the banks and EU institutions.  Because it's a wealthy country there don't seem to be too many crap cars there - I visited last week and all the cars I saw were new looking BMW, Audi, Mercedes etc - luxury vehicles and predominately German.  There was also a good number of top-of-the-range French Citroen and Renaults as well.  Oh, and I saw 2 Jags and an Aston Martin.  Very nice - Clarkson would love it.

The airport is small, and very restricted in that there only seem to be a couple of airlines licenced to use it - Luxair (the national carrier), Swiss and maybe Lufthansa.  It makes getting in and out interesting, travelling from Warsaw.  Outbound I went via Zurich and homeward via Munich.   There is no business lounge (at least that I could find) and only one small bar in the Departure lounge, plus about 4 duty free shops, and it's certainly not the cheapest airport I've ever been through.  I found the Luxair staff very unfriendly and not particularly helpful - the day before travelling home I tried an internet check-in for my flights.  The Lufthansa flight from Munich to Warsaw was fine, but I couldn't get to the Luxembourg - Munich first leg, despite it being another Lufthansa flight code.  I called the Service Centre, who confirmed my check-in to Warsaw but told me to use the Luxair website for the first leg.  I logged in, but was unable to get to my flight - the system did not accept any possible combination of the booking code, e-ticket number, my name, travel date and Frequent Flyer number, all of which appeared on the ticket.  I called their Service Centre and spoke to a very brusque man who told me that because the ticket was bought via Swiss the details did not appear on Luxair's system so I would have to check in at the airport.  He refused to answer when I asked him how come I'd been able to check in for my LH flight from Munich and ended the call.  Nice bloke..... 

It wasn't much better at the Check in Desk next morning - the girl there had problems finding the booking, took nearly 10 minutes to do so, and again wasn't forthcoming when I asked politely what the problem was.  It appears that Luxair operates in splendid isolation and does not belong to an airline alliance, despite operating codeshare flights with several airlines who are members of various alliances, which means there are no links between the various computer systems and makes check-in processes more difficult than is normal in the EU.....surprising, given its rampantly pro-European policies and hosting of sundry pan-European agencies.  This is fine as far as it goes: if that is the way that suits the airline best then I certainly can't change anything, nor am I entitled to try to do so......but equally, they still surely have a duty to provide a good service level to all customers, and that includes polite and helpful check-in and service centre agents, I would have thought.  But this not a new situation - I've flown to Luxembourg perhaps five times over the past 12 years, and every time it has been the same.  Despite service improvements virutally everywhere else in the world, never mind just Europe, the Duchy seems to exist in its own little bubble, impervious to increased customer expectations.  Surprising, and a shame.

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My first trip to Luxembourg was in 1981 or thereabouts.  At the time I was working for a major American investment bank, at the time the biggest in the world.  At the time also the European bond markets were growing extensively so of course my company was a leading player.  Market growth was being aided by the existance at two competing central securities depositories (Brussels-based Euroclear, hosted by US mega bank JP Morgan, and the smaller, more independant Luxembourg- based Cedel) of bond lending programs.  Put simply, members of Euroclear and Cedel were able to lend securities from their portfolios to other market participants who needed them - for instance to cover short sales - against a fee, the entire process done anonymously and managed by Euroclear and Cedel.  A lender did not know who had borrowed the bonds, and a borrower did not know whose securities he had borrowed, only the clearers had that information.  My bank had extensive portfolios at both organizations and hence was a major player in the system.

The problem was we had somehow contrived to lose track of what we owned, what we had lent and who we had lent to, by virtue of largely manual reconciliation processes (computer support was still in its infancy in those days) and perhaps taking on more than we could be expected to manage.  Clearly we were at serious financial risk - we are talking tens of millions of dollars worth of "lost" securities: small beer today but a significant number then.  One of our regular organizational changes brought in a new manager, a feisty middle aged lady from the US Southern states, who was horrified by the situation (rightly so) and immediately withdrew temporarily from both lending programmes until such time as we had properly reconciled all our positions and figured out where the hell everything was.  Needless to say, both Euroclear and Cedel threw their hands up in despair, and "invited" us to visit with them to discuss the situation.  So Betty put together a delegation, led by her, to make our case and off we went.  To this day, I have no idea why I was included - I'd been with the company for about 18 months, had little experience in the lending programs, and had only recently been promoted to supervisor of the unit charged with reconciling positions (but primariliy internally rather than against outside accounts such as these).

Anyway, off we went.  we flew from Heathrow to Luxembourg, arriving about lunchtime - there were few direct flights in those days - and met with Cedel's managing director in the afternoon.  Beyond saying hello, I did not participate in the meeting at all, merely sat there listening with an increasing level of boredom.  We were taken around the place and introduced to various managers who were involved in Cedel's lending program, and they were all very helpful and pledged to provide whatever support and assistance we needed.  In the evening, we were taken out to dinner at a restuarant in the city - for the life of me, I can't remember what it was called - that apart from an excellent menu and a fine selection of beers provided interesting diner entertainment: all evening porn movies were being projected on a number of wall-sized screens around the place, complete with sound.  It made for an interesting meal.....

The following morning we met up, all very hungover, and caught the train to Brussels (there were no direct flights at all between the two cities).  We travelled first class, which was the last coach on the train, and had it to oursleves, so spent the next 5 hours sleeping it off as the train lumbered slowly through the Ardennes in the rain.  We spent the rest of that day in similar discussions with Euroclear and again beyond introducing myself I took no part in the conversation.   By contrast to the open door visit hosted by the Managing Director in Luxembourg, our discussions with Euroclear took place in a windowless conference room somewhere in the basement of JP Morgan's Brussels office, hosted by a pair of middle managers.   Despite their somewhat hectoring manner, and complaints that our actions had depressed the entire European bond market, Betty stuck to her guns and refused to start lending again until we had completed our reconciliation effort.  Eventually, we were shown the door and shoved in a couple of taxis to the airport and flew back to London.

From memory, it took a month or so before we were ready to re-commence lending.  Cedel welcomed us back with open arms, Euroclear merely said, privately at least, "about time too....".

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So my first view of Luxembourg made little real impression on me.  I wasn't there long enough to appreciate anything at all apart from the undoubted quality of certain eating establishments in Europe (there was certainly nothing remotely like it in Tunbridge Wells, where I was living at the time).  I vaguely remember the city being small and full of old buldings, and the station platform being very cold and wet and lacking in shelter.  Beyond that, nothing.

It was 20 years before I went back.  By then I had left banking, started my Travelling Life, divorced, moved to Poland and met my second wife.....so quite a lot had happened.  A lot of change.  My company sent me to a bank in Luxembourg for a couple of days' business review and specification at a live customer of ours, and I managed to persuade them to let me take Ania with me (a VERY rare case of generosity by the company, I have to say!).   We flew via Frankfurt (for once a painless trip) and were booked in a city centre hotel.  While I was at work, Ania did some sight-seeing, and sat in the sunshine in the park, it being early summer.  In the evening we went to the Luxembourg equivalent of Warsaw's Old Town and spent a lovely time eating and drinking at an open air restaurant there.  The next day I finished early and we spent the afternoon and evening sight-seeing together, and sitting in the park, before another Old Town evening (but in a different bar).  We flew home the next day.  It was a nice trip.

But although my life had changed, Luxembourg, at least outwardly, hadn't.  It looked exactly the same as it had on my original trip twenty years before.  There seemed to be no more people on the streets, the old buildings looked unchanged, it still looked like the small European town it had been in 1981.  There was a little building work going on, close to the station - a new complex to house some EU institutions was underway, but that was about it really.

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Three or four years passed.  Then I was sent to our Luxembourg office for a training course.

I saw no more of the place than I had done previously - except for the roads.  I stayed in the Hilton hotel, fairly close to the airport and for that reason out of the town centre.  My office, it transpired, was right across the other side of the city, and the quickest way to get there and back was on the ring road - like the M25 only a lot shorter.  It was a 30 minute drive either way, and the office turned out to be in a little town (village really) just outside the main city centre - like Croydon I suppose, except that the entire village seemed to be about the size of the Whitgift Shopping Centre there.  There was literally nothing there: our office formed part of a building on an estate not unlike an English industrial complex except the buildings were office blocks, three storeys high and no more, instead of factories.  Across the roundabout at the estate entrance was a supermarket, part of a French Tesco-like chain (I can't remember whether it was LeClerc or Auchan) that also had a small sandwich and cake shop - that was lunch taken care of.  Then there were a couple of housing estates.  And that was all - no bars, not even a church or a petrol station (at least that I saw).  The taxi fare was EUR30 each way, which on a per diem of EUR56 left me short.   I had to get special dispensation from my management to claim the fares, since these normally form part of the expense to be covered out of per diem - I basically told them that unless they paid the fares as extras I would be on the next flight home.

It wasn't much of a trip.  Given the location of the office and the hotel in relation to Luxembourg town centre and the lack of money to spend, I had a sandwich at my desk for lunch and ate in the hotel in the evenings rather than spend another EUR50 getting into town and back (that's before meal costs).  Even the course was a complete waste of time.....

And I still had absolutely no view on Luxembourg apart from it being a bastard of a place to get to....

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But now I've had two trips within the past year, both to the same bank (another live site - we have have a dozen in the Duchy, it was one of the first areas in which we really made a mark).  The first time, last spring, I again stayed in the Hilton and had the chore of a taxi both ways.  Last week I stayed at the Sofitel, within walking distance of the bank.  And my eyes were opened.

In all those years, there has indeed been considerable change in the city: I just hadn't seen it.  Between the airport and the centre is the suburb of Kirchberg.  On my first trip (and possibly my second) it was no more than another small village on the edge of town that passed me by - I had no concept of its existance.  But now, sometime over the last 5 or 6 years I should think, a whole "new town" of modern multi-floor office blocks has sprung up cheek-by-jowl with the old village.  Cedel, now re-branded Clearstream and a much bigger organisation than it was on my 1981 visit, occupy one of the largest, an entire quartet of blocks surrounding a little square.  All the major banks are there, in buildings large and small, plus the major accountancy and consulting and legal firms like Deloittes and Linklaters, and some of those pan-European quasi- governmental offices.  There is a big shopping mall centred around an Auchan supermarket, with expensive looking boutiques and bistro's and sandwich bars.  There are two up-market business hotels next door to each other (the Sofitel and the Novotel).  A multi-lane highway - the John F. Kennedy Boulevard - runs through it to the city centre, all contra-flow systems with buses and taxis and normal traffic going in opposite directions on adjoining lanes - an interesting concept that seems to work fine but would cause complete chaos if it was tried in any UK city.......look at how well received bus lane on the M4 between Heathrow and London was when introduced a few years ago.  The whole Kirchberg area reminded me very much of a better planned and executed Canary Wharf - almost as if the Luxembourgers had watched Britain's attempts at creating a brand-new out-of-town financial district, spotted the mistakes and corrected them in their own development.

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So the Grand Duchy then......conclusions.

Well, it's a nice enough place I guess.  Pretty, in a rural central European way.  Very prosperous and good at what it does.  Expensive.  Good road links to the rest of the Continent, and probably improved rail links too.  Need to work some more on air links and certainly customer care at both the airport and the national carrier.

But all I've really seen is the area immediately surrounding Luxembourg (the city that is).  Because of its small size and the fact that it is landlocked, without a beach or a mountain to its name, it could never be considered a holiday destination, unless your idea of a holiday is roaming around admittedly pleasant countryside and doing a bit of expensive-car spotting.  But then, that is not what Luxembourg is all about.

Whatever its history, pre-1955 or thereabouts (when the original EEC came into being) - and I readily admit I know nothing about Luxembourg history - the country and the state are now completely bound to banking and EU governance.  It is a European centre of what used to be caused private banking but is now increasingly called Private Wealth Management - basically banks providing investment services to people with loads of money in order makes loads more, both for the people and the bank itself.  In that, it's very good - if not an exact rival to Switzerland, then doing very well indeed - and enjoys an excellant reputation.  As a founder member of the European Coal and Steel Council back in the mid 50s, that morphed into the European Economic Community and finally the European Union, it has been at the very centre of European politics for the past 60 years, and played a pivotal role in the EU's development.  It continues to be one of the EUs administrtive centres, along with Brussels and Strasbourg.  It seems very happy with its lot, and the people, affluent to a man, seem to have a lot to be happy about - nice looking homes (I've seen nothing resembling an inner city slum or apartment block), nice expensive cars (see above....) and nice shopping (all the biggest and most exclusive brands and outlets are in town).

Do I like the place?  Know, what, I'm still not sure.  There is nothing really to dislike about it, but equally I've seen nothing yet to make me feel anything more than ambivalent about it.   I enjoy going there, and it's a pleasant enough place when I get there, but if someone was to say to me that I'll never set foot in the Grand Duchy again in my life - well, I would neither shed tears nor lose sleep over it.

And I STILL can't think of any famous Luxembourgers!